Slide 1: Investor Update Q3 2017
Investor Update Q3 2017 1 November 2017 © Hexaware Technologies. All rights reserved. | www.hexaware.com
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements on this presentation concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and un
Slide 3: Business Update
Business Update www.hexaware.com | © Hexaware Technologies. All rights reserved. 3
Slide 4: Key Financials for Q3 2017
Key Financials for Q3 2017 GROWTH GROWTH Q3 2017 Q2 2017 QoQ YoY Revenue 154.03 152.61 0.9% 13.9% EBITDA (before ESOP cost) 28.13 26.66 5.5% 11.7% EBITDA % 18.3% 17.5% 0.8% -0.3% EBITDA (after ESOP cost) 26.86 24.79 8.4% 11.4% EBITDA % 17.4% 16.2% 1.2% -0.4% PAT 22.03 18.99 16.0% 28.8% PAT % 14.3% 1
Slide 5: Revenue Analysis - QoQ
Revenue Analysis - QoQ 0.9% Volume Growth 0.74 154.0 155 1.56 0.47 152.6 (0.70) (0.67) USD Mn---------------> 150 145 Increases Decreases 140 135 Volume Bill Rates Mix Revenue Q2 17 Revenue Q3 17 Calendar FX www.hexaware.com | © Hexaware Technologies. All rights reserved. 5
Slide 6: Gross Margin Analysis - QoQ
Gross Margin Analysis - QoQ 36.00 0.13 35.9 0.52 35.50 0.65 SG&A 27 bps QoQ %---------------------> (0.15) SG&A at $ 26.6 mn in Q2 17 vs $26.6 35.00 34.9 mn in Q2 17 0.13 34.50 (0.21) Higher SG&A cost due to investment Increases Decreases in Marketing Cost & Branding, debtors provisioning & other
Slide 7: Movement of Top 20 Customers
Movement of Top 20 Customers Top 20 Accounts by LTM Revenue Q3 2017 vs. Q3 2016 In Out • Specialized Payment Products and • Fortune 500 Construction & Mining Services Provider company • World’s leading Airline • Leading Canadian Airline • Premier Chain of Fitness Centers • Global Banking & Financial
Slide 8: Improved Depth of Customer Relationships
Improved Depth of Customer Relationships Q3 2016 Q3 2017 CONTRIBUTION GROWTH TOP CLIENTS GROWTH QoQ $50+ 2 3 Top 5 Clients -2.7% -4.9% $30 - $50 1 0 Top 10 Clients -1.7% -2.1% $20 - $30 2 2 Top 20 Clients -1.4% -1.1% $10 - $20 3 4 Other Clients 1.4% 5.1% $5 - $10 6 9 $1 - $5 63 64 REVENUE REVENUE TO
Slide 9: Strategy Proof Points
Strategy Proof Points USD 43 million NN Deal wins in Q3-17 Shrink IT Grow Digital End to End integration for a worldwide Enhancing Risk Management product mechanical solutions provider. and Digital Content Management for Global Risk Management Company. Automation led managed services help Automating
Slide 10: Employee Metrics
Employee Metrics UTILIZATION * EMPLOYEE ATTRITION Utilization maintained at high levels Attrition back to low levels 80.8% 17.4% 16.9% 78.6% 78.9% 79.7% 16.0% 16.6% 16.5% 16.1% 14.9% 13.8% 13.7% 74.1% 70.4% 69.7% 69.6% 70.0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2015 2016 2016 2
Slide 11: APAC led Growth
APAC led Growth APAC, GROWTH GROWTH Europe, GEOGRAPHY 10% QoQ YoY 11% North America -1.2% 9.9% Europe 2.5% 11.8% North APAC 20.0% 68.3% America, 79% TOTAL 0.9% 13.9% © Hexaware Technologies. All rights reserved. | www.hexaware.com 11
Slide 12: H&I led Growth
H&I led Growth Manufacturing & Consumer, and GROWTH GROWTH Banking & Financial VERTICAL Others, 27% Services, 43% QoQ YoY Banking & Financial 1.0% 18.7% Services Travel & Transportation -0.6% 3.6% Healthcare & Insurance 7.4% 17.8% Healthcare & Insurance, 17% Manufacturing & -2.0% 9.8% Travel & Consu
Slide 13: IMS led Growth
IMS led Growth GROWTH GROWTH HORIZONTAL (1) QoQ YoY Application Development & 0.5% 14.9% Maintenance (ADM) IMS, 11% BPS, 7% ADM, 36% Enterprise Solutions (ES) -1.7% -1.2% BIBA, 14% Digital Assurance/ Testing 2.3% 12.2% (DA) Business Intelligence & -0.4% 3.7% Analytics (BIBA) Business Process Service
Slide 14: Updated Guidance
Updated Guidance • Revenue for full year – Achievement to be in Upper end of 14-15% guidance • EBIDTA for full year – Previous guidance was that EBIDTA growth will be in line with revenue growth, i.e – 14-15% – Updated Guidance: EBIDTA Growth (post ESOP) – 16.5-17.5%. • Q4 outlook – Will have full i
Slide 15: Finance Update
Finance Update www.hexaware.com | © Hexaware Technologies. All rights reserved. 15
Slide 16: Revenue
Revenue Q3 2017 constant currency revenue at $153.3 mn; 0.4% QoQ; 13.3% YoY Q3 17 $ Revenue at $154.0 mn; 0.9% QoQ; 13.9% YoY Q3 17 INR Revenue at Rs 9,931 mn; 1.0% QoQ; 9.8% YoY Revenue ($ Mn) QoQ Growth 5.4% 3.49% CQGR 154.0 152.6 4.2% 144.7 2.7% 138.9 0.9% Q4 2016 Q1 2017 Q2 2017 Q3 2
Slide 17: Outstanding Hedge Position and Rates
Outstanding Hedge Position and Rates Outstanding Hedge Position Currency Pair Amount (Mn.) Avg. Rate USDINR ($) 152.88 71.38 EURNR (€) 3.90 81.61 GBPNR (£) 7.50 91.81 Total ($) 167.52 Note - 1.Hedges outstanding are full-term hedges. 2. EUR converted @ 1.1812/USD & GBP converted @ 1.3384/USD. 3. Avg
Slide 18: Forex Gain/(Loss)
Forex Gain/(Loss) 3.00 Total Gain/(Loss) • As compared to the forex 2.61 gain of $2.14 Mn in Q2’17, 2.50 the forex gain this quarter was $2.61 Mn. USD Mn-----------> 2.00 • Forex gains expected are 1.63 ~$1.63 Mn in Q4’17 and 1.50 1.38 ~$1.38 Mn in Q1’18 at exchange rate of INR 65.2850 / USD. 1.00 0
Slide 19: Balance Sheet Updates
Balance Sheet Updates CASH & CASH EQUIVALENTS Cash and Cash Equivalents* at US$ 70.73 Mn (INR 4,617 Mn) DAYS SALES OUTSTANDING Days Sales Outstanding (DSO) for Q3 2017 at 47 days; 72 days including unbilled DIVIDEND INR 1.00 per share (50%) Dividend Payout including taxes INR 357.1 Mn ($ 5.5 Mn) Tax
Slide 20: Thank you
Innovative Services Passionate Employees Thank you Delighted Customers © Hexaware Technologies. All rights reserved. | www.hexaware.com